More than ever companies are challenged to rethink their offerings while simultaneously being provided with a unique opportunity for creating or recreating their product-service systems. This paper seeks to address how servitisation can utilise the third wave of Internet development, referred to as the Internet of Things (IoT), which may unlock the potential for innovative product-service systems on an unprecedented scale. By providing an analysis of this technological breakthrough and the literature on servitisation, these concepts are combined to address the question of how organisations offering product-service systems can reap the benefits that the IoT. An analysis of three successful IoT implementation cases in manufacturing companies, representing different industry sectors such as metal processing, power generation and distribution, is provided. The results of the empirical research presented in the paper provide an insight into different ways of creating value in servitisation. The paper also proposes a framework that is aimed at proving a better understanding of how companies can create value, and add it to their servitisation processes with, the data obtained by the IoT based solutions. From the value chain perspective, IoT aided servitisation enables organisations to extend their value chains in order better serve their customers which, in turn, might result in increased profitability. The article proposes further research avenues, and offers valuable insight for practitioners. •Internet of Things can enable possibilities of servitization for manufacturing companies.•Three case examples are analysed from value chain perspective.•IoT provides opportunity to access end-user operations and build service-products on data analytics.•A desired value chain positioning shift is toward downstream.